For what term does the personal guarantee by owners of an interest in the Franchisee extend under the Checkersrallys Franchise Agreement?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
| In consideration of, and as an inducement to, the execution of the Franchise | | Agreement dated as of | | , | | (the "Agreement") by and | | between | | CHECKERS | | DRIVE-IN | | RESTAURANTS, | | INC. | | ("Franchisor"), | | and | | ("Franchisee"), each of the undersigned owners of an | | interest in Franchisee hereby personally and unconditionally: | | (1) guarantees to | | Franchisor and its successors and assigns, for the term of the Agreement and | | thereafter as provided in the Agreement, that Franchisee shall punctually pay and | | perform each and every undertaking, agreement and covenant set forth in the | | Agreement and that each and every representation of Franchisee made in | | connection with the Agreement are true, correct and complete in all respects at and | | as of the time given; and (2) agrees personally to be bound by, and personally liable | | for the breach of, each and every provision in the Agreement, including without | | limitation, Sections 5, 7, 8, 13, 16 and 18 (for the avoidance of doubt, including | | Section 18.05) thereof.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to the 2025 Checkersrallys Franchise Disclosure Document, owners of an interest in a Checkersrallys franchise must provide a personal guarantee. This guarantee extends for the entire term of the Franchise Agreement. Furthermore, the guarantee continues even after the agreement's term, as specified within the agreement itself.
In practical terms, this means that if the Checkersrallys franchisee fails to meet their financial or operational obligations during the franchise term, the personal guarantor(s) are liable. This liability isn't limited to just the initial term; it extends beyond that period as defined in the Franchise Agreement. The personal guarantee ensures that Checkersrallys has recourse to recover any losses or damages resulting from the franchisee's non-compliance.
Prospective Checkersrallys franchisees should carefully review the specific sections of the Franchise Agreement that detail the obligations covered by the personal guarantee and the conditions under which it remains in effect after the initial term. Understanding the full scope of this guarantee is crucial, as it represents a significant personal financial commitment tied to the success and proper operation of the franchise.